The continuing economic downturn in Pakistan with a debt servicing projections at $31.3 billion until 2022-23 calls for immediate measures. Inevitable steps are required about dwindling exports, burgeoning imports, ballooning twin deficits and exceeding debt liabilities. The Finance Minister divulged on the floor of the parliament that Pakistan needs $9 billion for which strategies must have been made.
Let’s look at an analogy. Greece, a member of the European Union, is the 51stlargest economy in the world with a nominal gross domestic product of $200 billion. Its exports were euro 29 billion and imports were euro 50 billion in 2017. Way back in 2009, the Greek economy faced its most-severe crisis leading to a crisis in international confidence in Greece’s ability to repay its sovereign debt. The government of the day came up with a very unpopular decision of harsh austerity measures to bring its deficit under control. There were massive protests against the government and its decisions of euro 65 billion of austerity. Confronting a wave of protests over the period of a few years, the incumbent government stood fast and did not give in for the betterment of the country. The dawn of 2018 brought bonanza of happiness for those who pushed through the difficult times. Greece is on its feet today.
The incumbent Pakistan government has come up with a robust austerity plan which might perturb the hidden enemies of Pakistan. Prime Minister Imran Khan in its first televised address to the nation on August 19, 2018 endeavored to take the nation into confidence about austerity measures to be announced. He also invited overseas Pakistanis to invest in the country so that Pakistan’s economy may prop up. Later on, there were discussions about offering profitable dollar bonds to the overseas Pakistanis.
Donald Trump, the US President, asked Ms. Indra Nooyi, the former CEO of PepsiCo Inc. to help him in fixing the economy. THIS IS THE POWER OF THE CORPORATE SECTOR
Here comes something to be done: the contribution by the high net worth individuals and the corporate Pakistan. Pakistan needs to come up with a fund for the high net worth individuals and the Corporate Pakistan. It would be great if a National Fund for Pakistan’s prosperity may be generated and overseen by the government with the massive participation of the corporate sector of Pakistan.
PepsiCo Inc. an American multinational food, snack, and beverage corporation’s revenue was more than $63 billion in 2017. Anglo-Dutch Unilever’s total portfolio value is $42.9 billion.
American multi-national consumer goods Procter & Gamble Co. enjoyed the revenue worth $65 billion in 2017. Apple and Samsung are the tech giants of the century. Apple’s last year profit was $53 billion.
The performance of the corporate sector of the USA, UK, South Korea or any other country indicates the power an economy has got.
Pakistan’s corporate sector and the high net worth individuals are the indication of the country’s economic strength. There are big names in Corporate Pakistan such as Nishat Group, Hashoo Group, Indus Motors Company, House of Habib, Bahria Town, Lakson Group, ChenOne, Atlas Group, Attock Group, Engro Corporation, Gul Ahmed Group, Ismail Industries Limited, Ittefaq Group etc. to name a few.
In order to tackle the immediate conundrums, Pakistan need not go to International Monetary Fund or the friendly countries. Pakistan must announce a National Fund worth $100 billion dollars to be overseen by a group of high net worth individuals with the regulatory authority in the hands of the Finance Ministry. The amount generated by this Fund may be given to the Government of Pakistan to meet its emergent obligations and to invest for employment generation and production enhancement. This step may save Pakistan from averting the tough IMF measures and looking towards the friendly countries. The modalities of the National Fund may be chalked out on a war footing. It must be made mandatory to create one entity from the amount of the National Fund, which should be meeting the export requirements of our neighboring countries so that exports to particularly China may be augmented for the balance of trade. Corporate Pakistan has plenty of funds to help itself and the country for the long term prosperity. The supervision of the National Fund should be stringent and the investment of its amount should be restricted to the sectors of the economy within the borders which may help bolster the exports. Eight million overseas Pakistanis may chip in as well to help their homeland and to help themselves in terms of handsome returns.
With such measures, the current ailing economy of Pakistan would turn into an emerging economy in a couple of years provided that the regulatory measures are in place and the individuals responsible of overseeing do not work for the vested interests rather they work for the national interests. The peculiar thing of the National Fund should be: i) only the Pakistani investors and ii) nothing should be allowed to be repatriated to any other country.